Petition to amend BR threshold?

[thechippy]

Ok,

I've been thinking about this a lot recently.

Firstly, lets look at the original thinking behind BR. It was in the main, devised as a route for an individual to relieve themslves from overwhelming debt and be able to make a fresh start. Should this route be chosen, it's only fair that the debtor accepts the serious consequences that come with it.

However, it can become unfair to the extreme when either an individual or a company decides to make you BR.

One examle.

You owe creditor A £2,500 and creditor B £12,000
Creditor B is quite happy to accept reduced payments over an extended period of time to recover their money.

Creditor A is being impatient, greedy and decides to BR the debtor. After all pro rata payments are made and assetts disposed of, at the end of the 3 year period creditor B has only got back a fraction of the £12k due to no fault of their own.

This is extremely unfair on Creditor B who was willing to co-operate and wait.

The same applies where Mrs x and Mrx own a property. Say Mr x has been quietly racking up debt behind Mrs x back until it gets out of control. There is some equity in the property, so one creditor decides to BR Mr x.
The home has to be sold. Mrs x has lost her home through no fault of her own whatsoever!! (I know of a case where this actually happened because it was a dopey mate of mine)

I think it would be far fairer that the threshold for someone making you BR to be raised to say £15k and not the poultry £750. Not only that, it should also not be granted unless the claiment can reasonably prove that it's the only realistic way they can get all or part of their money back.

I would leave the existing limits for those that want to self BR.

Does anyone want to add to this?

I'd really like to start a serious campaign / petition to get this law changed with your help.
Does anyone agree, or am I on a no hoper??

[Miss Molly]

Re: Petition to amend BR threshold?

Could Creditor B not have objected to the BR order?

Did Mr X rack up the debt in both his and his wife's name? If not surely she couldnt be forced to sell her home in order to pay Mr X's debt ?

[Riz]

Re: Petition to amend BR threshold?

I did hear a while back that they were think of upping it to £1,500 to £3,000 for creditor petitions.

I'm not sure the idea progressed though, as seems to be no mention in the latest consultation on reforming the BR petition process?

News : NDS- BIS announces new bankruptcy petition proposals

[MrsD]

Re: Petition to amend BR threshold?

Interestingly in Scotland the personal BR limit appears to be 1500 but a creditor can't make you BR for less than 3000

Can a creditor make me bankrupt?

Many debt collection letters threaten to make you bankrupt if you do not pay your debt. However most creditors are unlikely to make you bankrupt for the following reasons:

• You must owe £3,000 or more, including any fees, charges and interest, before a creditor can make you bankrupt (although two or more creditors can 'club' together and apply to make you bankrupt).
• Creditors will also have to pay their solicitor’s costs and court fees.
• They are unlikely to get any money back unless you have assets that can be sold to pay your debts or your income is above average and you are able to make regular payments from your income to pay off your debts.

A creditor wanting to make you bankrupt must send you a copy of the Scottish Government's Debt Advice and Information Package.
They must also prove that you have become apparently insolvent within the last four months. This means that you have been served with either a charge for payment or a statutory demand and have not paid the debt within the time limits.
They will then prepare a petition to send to your local sheriff court, which asks the Sheriff to sequestrate your estate and make you bankrupt. The petition will also be served on you by a Sheriff Officer. They will visit your house or place of business and hand it over. If no-one is in to accept the petition, they will leave it at your house or business


the four month thing is interesting, I take that to mean they can't BR you if you have haven't paid for more than 4 months???? or is that my eternal pollyanna coming out?

[thechippy]

Re: Petition to amend BR threshold?

Could Creditor B not have objected to the BR order?

Did Mr X rack up the debt in both his and his wife's name? If not surely she couldnt be forced to sell her home in order to pay Mr X's debt ?

I think creditor b can object but it's not always successful.

Mr x in this instance is taking out the debt in his own name.
The trustee can still sell the home. Mrs x would still get her half of the equity, as the trustee cant touch that, but she still loses her home through no fault of her own. This is where it becomes very unfair indeed.

My thinking is that the consequences of being made BR are very serious with knock on effects, therefore the minimum amount you can be BR'd for should be a serious sum and not some stupid amount like £750 or even £2-3k.

[Riz]

Re: Petition to amend BR threshold?

I did hear a while back that they were think of upping it to £1,500 to £3,000 for creditor petitions.

Was 2010, and nought happened from it.

Insolvency News - Threshold on creditors' bankruptcy petitions may rise to £3,000

[pompeyfaith]

Re: Petition to amend BR threshold?

FP,

I thought there was a government consultation on this to raise the threshold to that where unsecured debt ends and becomes secured.

Not sure how far they got with that though.

[Undercover Elsa]

Re: Petition to amend BR threshold?

Hi,
It's still in progress AFAIK.
It was put forward by Edward Davey:
http://www.theyworkforyou.com/wms/?i...A10155#g89WS.2

The £750 level was set in 1986. Depending which index you use that' now worth
£2280 using average earnings, or £1640 using RPI. Roughly 3 time as much. By comparison housing prices have gone up by around 8 times as much since then.

The debt industry aren't too pleased about the proposals, obviously, judging by what this odious woman has to say. Her words contravene OFT Debt collection guidance!

Shep x

[Wishfull]

Re: Petition to amend BR threshold?

Could Creditor B not have objected to the BR order?

Did Mr X rack up the debt in both his and his wife's name? If not surely she couldnt be forced to sell her home in order to pay Mr X's debt ?

surely the reciever should force the crediter to go for a charging order on a home with equity rather than BR order espesialy were in joint names so the other half dont lose thier home

[thechippy]

Re: Petition to amend BR threshold?

surely the reciever should force the crediter to go for a charging order on a home with equity rather than BR order espesialy were in joint names so the other half dont lose thier home

Unfortunately, they don't. I'm not sure if they actually have that discretion within their rules / guidelines.

With regard to HMRC which has been mentioned, there would be nothing stopping the threshold of £750 being left the same for the purposes of tax collection.